Small Business Accounting Simplified

Accounting can be a difficult task for startups and small businesses. But there are some ways to simplify the process and make it more manageable.

1. Calculate a minimum monthly profit and write down your ideal monthly profit You need to keep proper records of all invoices and payments to get an idea of what you make in a month and to figure out how much it will take to keep your business running. This is the first step to making it happen. Keeping track of these records will show you when invoices are paid, how long it takes customers to pay you, and if you're having difficulties collecting payments from particular customers. By keeping track you can come up with an exact number you'll need to earn each month. 

2. Keep your personal and business finances separate The biggest mistake you can make is to mix business with personal, which can keep you from knowing the true state of your finances. Avoid using your business credit card to pay for personal expenses. Maintaining separate bank accounts for your business and personal finances will save you time in the long run and make it easier to track expenses. 

3. Maintain records It is imperative to always keep all receipts, invoices, bills, bank statements, etc. If you write down a number for office expenses today and forget to keep your receipts, a few months from now you will not remember from where that number came.

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